Charterland Reinstatement Cost Article in Hurricane Supplement

Being prepared is key in enabling property owners to make a timely insurance claim for damage to their property and to ensure a reasonable and fair settlement from their insurance company.

Based on experience gained from Hurricanes Mitch, Michelle, Ivan and Paloma there are a number of steps that should be taken by any prudent property owner, both prior to and following an event, where a claim on property insurance may be necessary.

Prior to hurricane season, one of the most important preparations would be to ensure that a current reinstatement cost assessment has been prepared with respect to the property, by an appropriately experienced Chartered Surveyor and that the insurance cover is appropriate to the assessment. It is advisable to keep a copy of the reinstatement cost assessment in a safe place, with your insurance policy and other important documents, as it will assist greatly in
establishing the design and specification of the property in the event of a total loss. It would also be prudent for an owner to take their own photographic record of their property and belongings.

Although photographs will be included in a reinstatement cost assessment they will generally only be for the purpose of identifying the specification of construction and level of finish of the building and other improvements to the property specified by the client. The owner should therefore have their own photographic record of their contents. Following damage to a property by a hurricane, or other event, the owner should first contact their insurance company, as soon as possible, and inform the company of their intent to make a claim. At this point, a claimant may decide to retain the services of a local, independent Chartered Surveyor in order to prepare a damage assessment, which will professionally record and cost the damage incurred. In this case, in order to avoid any potential conflict of interest, it is essential to ensure that the Chartered Surveyors are not engaged by any of the firms of international loss adjusters and would therefore also effectively be working on behalf of the insurance companies. Caution should also be had in retaining the services of ‘Public Adjusters’ who are paid based on a percentage of the value of the overall claim, rather than a set hourly rate normally charged by Chartered Surveyors. Such method of payment means that the public adjuster has an inherent interest in maximising the claim, rather than making a reasonable and independent assessment. Whilst the maximisation of a claim may initially seem attractive to a claimant, claims submitted by public adjusters are more likely to receive extra scrutiny from the insurance company which can cause delay in receiving payment. Using a local firm of Chartered Surveyors in the preparation of an insurance claim for property damage means that they will also be able to readily assist in the procurement of the reinstatement and repair works, as soon as payment is received from the insurance company, thus ensuring that the claimant and his family are back in their home in the shortest possible time.

Simon J. Watson is the Director of Charterland Ltd. responsible for Valuations & Appraisals. He is a Fellow of The Royal Institution of Chartered Surveyors (FRICS), a founding Board member and former Vice-Chairman of RICS Caribbean and Caribbean representative to the Board of RICS Americas. Simon has over 20 years experience in surveying, the majority of that experience gained in the Caribbean. Charterland Ltd. are a firm of Chartered Surveyors based in the Cayman Islands but providing a comprehensive range of property consulting services including valuations, cost consulting, property management and insurance claims adjusting services, across the Caribbean region.